MEDIA; Publisher's Web Books Spur Hardcover Sales

Jim Baen would hardly seem an advocate of electronic publishing. He says derisively that he is ''not sure it's legal to actually make money in e-publishing.''

E-books? ''There's no there there.''

The Web? ''I'd go bankrupt in a day if I had to depend on it.''

To hear this, one would never guess that Mr. Baen's company, Baen Books, a small but established publisher of science fiction, has mounted innovative Web efforts that address some of the most pressing issues in publishing: the viability of e-books, online piracy and the role of readers in an interactive age. Even odder, Mr. Baen has stepped on his own punch line by making money in e-publishing.

Since late 1999, visitors to the Baen.com have downloaded more than 100,000 electronic texts. Some were distributed free, but almost four of every five were part of a paid program called Webscriptions, which sells the publisher's forthcoming print books in online serial form.

Webscriptions (www.webscription.net) makes a modest profit, and the give-away program, called Baen Free Library, is a volunteer effort with no overhead costs. But the two programs' economic value to the company is incalculable. They have spurred sales of the company's books, which are distributed through Viacom's Simon & Schuster unit. Mr. Baen is particularly surprised that the electronic downloads have even stimulated sales of the company's hardcover books.

It is a striking puzzle: the more e-texts Baen Books makes available cheaply or free, the more it has been able to sell the most expensive kind of printed book. ''We are drifting from being a paperback house to a hardcover one because of the Net,'' Mr. Baen said.

The view that Baen's electronic-publishing efforts have improved its market for printed science fiction books is shared by Charles N. Brown, a observer of that category. ''Baen has shown that putting up electronic versions of books doesn't cost you sales,'' said Mr. Brown, publisher and editor in chief of Locus Magazine, a monthly publication that closely tracks science fiction. ''It gains you a larger audience for all of your books. As a result, they've done quite well.''

Webscriptions is an effort to recreate the feel and excitement of old-fashioned science fiction serials, in which stories unfolded month by month in pulp magazines like Galaxy, where Mr. Baen was formerly an editor. For $10 a month, members can download four or five books that are soon to be published on a three-month installment plan that concludes several weeks before print publication. In other words, electronic versions of Baen's new hardcovers are available for less than a tenth the cover price even before the books are published. As a code of honor, subscribers are asked not to circulate the free copies they download.

This service runs counter to common wisdom in the industry -- including paying royalties of 20 percent, double the amount for traditional books, and allowing readers to customize how the e-texts look in their word processors.

Based on the high turnover of subscribers and the response, Mr. Baen is convinced that customers use the service to sample works, not read them in their entirety. That may explain why the company has no plans to publish original e-books solely in electronic form.

By the same reasoning, the company hopes the Baen Free Library (www.baen.com/library) can increase the audience for Baen titles by offering the full text of select books at no charge, said Eric Flint, a Baen author who led the project. Mr. Flint said that of the more than 400 readers who had e-mailed him about the free library, some 90 percent indicated they planned to buy a printed Baen book as a result of visiting the free site. The free library contains 15 books by various Baen authors, and there are plans to add up to four new works each month.

''I got into an online brawl with some other authors over the issue of online piracy,'' Mr. Flint said, explaining the free library. ''Their cure -- all sorts of new laws -- was worse than the disease. Whatever the moral difference, the practical effect of online piracy is no different from that of any existing method by which readers obtain books for free or at reduced cost, such as borrowing from friends.''

It is worth noting, though, that only eight of Baen's dozens of authors have offered texts to date. ''My agent is concerned about the effect posting complete works for free might have on future rights sales,'' said Lois McMaster Bujold, one of Baen's most popular authors, whose work is not available on the Free Library.

But Ms. Bujold's work has been promoted in Webscriptions and on Baen's Bar, the Web site's popular bulletin board, where authors and readers routinely interact about works in progress. Mr. Baen often posts snippets from a coming book on the bulletin board -- sometimes no more than 5 to 10 paragraphs. He began the practice with Ms. Bujold's ''Civil Campaign'' in the summer of 1999, and she credits it with pushing pre-publication orders for the book into Amazon's Top 10 that August.

Mr. Flint said he even used Baen's Bar a few years back to ask readers to help with the extensive research required for one of his books, ''1632.'' He said the result was thousands of helpful postings -- and a ready-made audience for the book, which is now in paperback and is an Amazon science fiction best seller.

Mr. Baen, anticipating the power of the online media, established the policy two years ago of buying all electronic rights when it strikes a book deal with an author. The issue of electronic rights has become a point of contention in the publishing world, and was behind a lawsuit that the Random House division of Bertelsmann filed last week against an electronic books start-up company, RosettaBooks.

The bigger question is whether larger publishers have anything to learn from the Web efforts of an independently owned publisher like Baen Books, which is in Wake Forest, N.C.

Yes, says Daniel O'Brien, a senior analyst for Forrester Research who closely follows electronic publishing. ''I think what Baen is doing,'' Mr. O'Brien said, ''is a harbinger of how you can leverage the Web's interactive nature to build relationships with readers and create entirely new revenue streams.''

Certainly any publisher would love to have readers as loyal as Suellen Tapsall.

''I have bought far more Baen books than would ever have been the case without Baen's Bar, Webscriptions and the snippets,'' Ms. Tapsall, a subscriber in Perth, Australia, said via e-mail. ''I look for Baen books first when I go to the bookshelves. Why? Because it's a partnership with Baen and its authors. Other publishers just want my money. I am far more willing to spend my money on my friends.''